The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1887-04-03

making special arrangements, were
able to tecure rates below those which |
the shippers would be compelled to |
pay to the roads II they dealt |
individually. Then the roads |
began the through traffic system
and frequent conferences between
agents If the various lines became
Eecest AIRY, which conferences finally
resulted in associations, of which the
Southwestern Railway snd Steamship
Association was one. He read the ar
tic'es of association. Commissioner
Walker asked il the association was in
the nature OF pool. Mr.. Smith re.
Piled that verythipg in the nature OF
an allotment OF rrsffic, ordinarily
termed a pooling arrangement, had
been eliminated. Very little authori-
ty, be continued, was delegated to the
association. The organization depend
ed upon voluntary compliance with
the arrangements agreec upon. There
was no power TO enforce compliance.
Mr.. Smith produced map OF the ter
ritory covered by the association, and
pointed cut the wafer lines which sur
rounded and penetrated 1t. Many OF
the lines of transportation upon these
waters, he said, were not subject TO
the interstate commsrcs law, though
nearly all OF them were engaged
in Interstate traffic. The first OF
the railroads were built to con-
meet particular points with the
water. Their rates were in all
cases greater for long than for short
hsuls. 1t Yves found that tor short
distances animal transportation was
cheaper than rail traffic, but for dis
tsnces of twenty five miles or mora
rail transportation at profitable RATES
was cheapest. When, alter a lime,
great sgril IL tural centeTs weiereached,
II vas found that upon some materials
of large bulk the established rates
were such that no Ell ipments could bs
proftsbly made. ThIs discovery gave
the railroad people their first lessons
in the art OF promoting transporta-
ton" When different lines were
comp]eted to points whers they came
into competition wi b each other and
with Ta'er lines, railroad managers
first aWoka 10 the fact that they could
compste with water lines, which they
had YER before expected to do, and
here first wss presented tbs question
of accepting less for tue long han the
short hauls. A discovery was male
which was and is seemingly aparadox
Ii was that st allie could be transport
ed and yield = profit at r rate thai is less
than tho average cost that additional
| nfflic secured at theJ ate Il a. yields
revenue in excess o! the additional
cost Of csirl5gs, though less than the
average cost, produces q profit. Mr..
! Smith contendei That the rates fixed
hy the Louisville aud Nashville COM
pany are not il violation Of the acs OF
Congress. Ii p ohibi'ed from charg-
ing iees for longer distance than for
shorter, where the conditions arc cub
slantially similar, then, he argued,
they were author zed 10 charge less
for long than for q short distance
where the conditions are substantially
dissimilsr, provided the rates TO and
from nou-competitiv5 points are just
and reasonable, Some of his associ-
stes, representing OTTER large corpora
tons, did not sgtss with him, but held
that under no conditions could any
greater charge be- made for short than
for longer haul, unless authorized by
this commission. Mr.. Smith card his
company hsd received notices from all
the great lines of the North that
from and after the SIN it,
slant all existing traffic arrange
meDts must cease. This WIS
due, he explained, to a difference in
the interpretation of the law. These
roads bases their action unon the re-
fusal of the Louisville and Nashville TO
reduce its local rates below it's through
rates, holding that they would be
liab'e as participants in aov penalties
incurred by The former. Nj. Smith
set forth at 1usiderabie length the cir
cumsiances which led the Northern
trunk lines to make such a Coustrtsc-
ion # the law. They we're not sub
iect to such an extent to water comps-
ti;iou end their Interpretation vas the
only one that was advantageous to
them. They would appear before the
Commission and advocate an,iuterpre-
talion which would b ntfit but aak-
rupt us. Mr. Smith did 10! believe
there was any reGsSn f>r the present
sgitation. Surely ca Tifr, Wers not to
&c punished for q violation Of q Ia Y
which they could not und erstand.